Direct Loan Program Student Loans: Terms and Conditions (CRS Report for Congress)
| Release Date |
Revised Aug. 26, 2024 |
| Report Number |
IF12267 |
| Report Type |
In Focus |
| Authors |
Alexandra Hegji |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
The William D. Ford Federal Direct Loan (Direct Loan)
program is the largest source of federal financial aid
supporting students’ postsecondary educational pursuits. As
of March 31, 2024, $1.4 trillion in Direct Loan program
loans, borrowed by or on behalf of 38 million individuals,
were outstanding. When borrowing a loan, a borrower
assumes a contractual obligation to repay the debt over a
period of time that may span a decade or more.
Under the program, the government makes loans to
individuals using federal capital. The loans are an asset of
the federal government, and the government assumes the
risk of losses that may occur as a result of borrower default
or loan discharge or forgiveness. The Department of
Education’s (ED’s) Office of Federal Student Aid (FSA) is
the primary entity tasked with administering the program.
Working with FSA, institutions of higher education
originate loans to borrowers, and FSA contractors service
and collect on program loans.
This In Focus provides a brief overview of the terms and
conditions of loans made under the Direct Loan program.
For a comprehensive description of these terms and
conditions, see CRS Report R45931, Federal Student Loans
Made Through the William D. Ford Federal Direct Loan
Program: Terms and Conditions for Borrowers.
